Employment Policies Institute research director Michael Saltsman on President Obama's call for increasing the minimum wage and state efforts to do likewise. Photo: Getty Images

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... welcome back to Opinion Journal why Mary Kissel ... it's not everyday that the president announces a plan to put more people out of work ... these are unusual times ... Employment Policies Institute a research director Michael Solsman joins me now from Washington ... to explain that Michael ... I thought raising the minimum wage price people out of work that securely teens and minorities am I wrong ... now we are not and and that's exactly right to be looking for the economic research on the service is very clear that it does to people I work ... aam but also services intuition tsunami a few of the businesses that hire ... people of the minimum wage like a restaurant or grocery store ... on they have single digit profit margins two or three percent soon ... you raise their labor costs by twenty four percent is the present wants to do ... and they can just absorbents in that either means they gotta find a way to raise prices in the county that ... they needed death by the same product with weak they're the same demons and product with fewer people with less service so ... that's how we you know have things now or will it say we bag your own groceries or in a long time ago we pump around doubts and ... the conveniences that use the for someone else's job description so why would Democrats want to do this what's in it for them ... what what's it for then is that it's a it's a politically it's a very popular thing to do I mean if you do pulling on the minimum wage ... you know I think that the most recent poll I saw was maybe seventy five percent of public supported so I think ... that that something like this out there and something that Republicans are always there responding to and so ... I makes them look on and and and it's a thing they can use to pressure people ... on for the midterm election twenty fourteen ... this isn't just a Democratic issue we've got a chart here federal minimum wage increases over time I wanna put up on the screen ... starts in nineteen ninety seven and it shows that steady progression upwards ... of Romney seem to support raising the minimum wage his campaign Chris Christie New Jersey another Republican ... George Bush ... II is the simple Ai is something that we we we just can't get away from because politicians ... like to do it because it's popular ... well I think there's there's a limited deal making always Canada's night you know Republicans who made the sign off on a smaller minimum wage increase ... their sons are temporary tax break in vaults ... I'm but I I don't missiles and they can get policy noted that everyone talks about the minimum wage employment that the biggest thing about the minimum wage ... from the progressive perspective is that it's done nothing to reduce poverty rates mean the evidence on raising the minimum wage in reducing poverty ... it is now in so ... the idea that I'm you would do this policy the struggling not to keep up the people you want to ... conceiving and the actively harmful it's it's kind of a head scratcher why ... Republicans would be willing to be on something new I'm glad you raise tax credits and earned income tax credit you mention in your Wall Street Journal op ed this week ... on most every president in the last three decades has raised it has increased the number of Americans who don't pay taxes ... who actually get money back from the government ... ay ay ay ay is there any prospect of re forming this given that Congress is thinking about ... tax reform ... well I mean I'd I think the the ... the conversation about during its Xstrata right now I think acetate place in the context of the minimum wage job ... the president wants to raise the minimum wage to keep the response of any use to be well ... but when he says that someone earning the minimum wage is only making fifteen thousand dollars year is not being a price of being truthful is if you're a single pair with a couple of children ... you get an additional fifty two hundred dollars because of the year in income tax credit ... which was expanded you know as recently as two thousandnine ... and so I think before we knew that with less anime and employers need to look at what we've done already to help these families now which is a considerable number talk about a ... thirty or forty percent wage subsidy ... Michael I'm ... and other reform idea City Index minimum wage to inflation when you think about that ... I think it's it's misguided and I I think it's based on the premise that people who are in the minimum wages stock there ... aam but there's been a couple studies one published in the day at the monthly labor Revue ... out one from a couple economists at a Miami and death where is the universe he ... did a survey found that people don't spend a lot of time that the minimum wage and a two-thirds earner raise in the first one to twelve months on the job ... and so it that way they did it ever snows by experience ... I and an already good experiencing the job the first place nineteen ... those jobs are more tougher and more difficult to come by when when you make those people more expensive to hire businesses in just a federal issue this is also a state issue ... um we've got a short charge here showing states that are seeking to raise the minimum wage ... and boy there are any economic basket cases Illinois ... New York ... and New Jersey ... Michael and I e what is your message to these governors ... well I it's it's it's that it's a whole minute to stop him because ... I mean those three states Reggie great examples those are all states that have teen unemployment rates right now ... they're above twenty five percent ... these are states where young people are struggling to find work ... I the idea that you would accede to employers they were going to put another barrier app ... TUI airing these people I mean is is just a foolish and it's it's mind boggling you want to ... I'm usually do something for low income people I think you can talk about doing at ... making estate credit to the hearing of tax credits they haven't already expanding that ... but a minimum wage increase is just the wrong move ... ok the great news for Texas and Florida without the ... lower and lower tax rates are attracting people ... at a New York New Jersey California and Illinois ... an Employment Policies Institute research director Michael Solsman thank you so much ... for being with this